Question

At the end of 2014 the following information is available for Fargo and Huston companies:

Required a. Prepare a common size income statement for each company. b. Compute the return on assets and return on equity for each company. c. Which company is more profitable from the stockholders’ perspective? d. One company is a high-end retailer, and the other operates a discount store. Which is the discounter? Support your selection by referring to the appropriateratios.